MDA Breakout Stocks Week 35 - September 2022: Short-Term Picks To Give You An Edge

Aug. 29, 2022 7:20 AM ETAAPL, AMGN, BERZ, BYND, CELH, CLFD, CRM, CVX, DQ, ENPH, GOOG, GOOGL, GTHX, HON, IPI, K, MCD, MRK, MSFT, NOG, RES, SOXL, SPY, TA, TANNI, TANNL, TANNZ, TDW, TRIL, VRDN, YMM6 Comments

Summary

  • Two new Breakout Stocks for Week 35 with better than 10% short-term upside potential and a Dow 30 Pick. Average cumulative returns now up to +110.9% YTD.
  • This week one pick beat 10% gains in less than week with FAZE +15.2% and top gains in WTTR +9.4%. After back to back weeks with a breakout above 34%.
  • The streak of weekly picks gaining over 10% in less than a week of trading days increased to 222 out of 274 trading weeks (81.0%) not counting multiple gainers.
  • All the V&M Portfolios are beating the S&P 500 YTD. Plus new July midyear picks are also up Piotroski-Graham +12.5%, Neg Forensic +33.8%, YTD Bounce/Lag +37.6%.
  • The MDA breakout picks continue to beat the S&P 500 into 6 consecutive years delivering a CAGR +31.8% and 718.1% compounding returns through 2022. In 2021 returns were +70.5%.
  • Looking for a portfolio of ideas like this one? Members of Value & Momentum Breakouts get exclusive access to our model portfolio. Learn More »

sun rays inside coconut palms

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Introduction

The Weekly Breakout Forecast continues my doctoral research analysis on MDA breakout selections over more than 7 years. This subset of the different portfolios I regularly analyze has now exceeded 260 weeks of public selections as part of this ongoing live forward-testing research. The frequency of 10%+ returns in a week is averaging over 4x the broad market averages in the past 5+ years.

In 2017, the sample size began with 12 stocks, then 8 stocks in 2018, and at members' request since 2020, I now generate only 4 selections each week. In addition 2 Dow 30 picks are provided, as well as a new active ETF portfolio that competes against a signal ETF model. Monthly Growth & Dividend MDA breakout stocks continue to beat the market each year as well. offer 11 top models of short and long term value and momentum portfolios that have beaten the S&P 500 since my trading S&P 500 since my trading studies were made public.

Market Outlook

The Momentum Gauges®, economic events, and weekly market outlook are now separated into a new weekly article here which also includes my new weekly Technical Market update videos. Forecasts from last week continue unchanged:

Momentum Gauges® Stoplight signals for Week 35 with new monthly gauges added and monthly gauges still negative from November. S&P 500 gauges turned negative ahead of the close on Friday and the Premium Portfolio automatically moves to cash on that gauge signal.

Momentum Gauges stoplight signals

VMBreakouts.com

Current Returns

In a quick study of the MDA breakout selections YTD there are 88 picks in 35 weeks beating the S&P 500. 64 are picks beating the S&P 500 by over 10%+ in double digits. Leading MDA gainers include (CLFD) +97.9%, (TA) +57.1%, (VRDN) +86.8%, (TDW) +85.7, (RES) +83.1% of the 75 picks beating the major indices YTD.

2022 MDA breakout returns

VMBreakouts.com

Additional background, measurements, and high frequency breakout records on the Weekly MDA Breakout model is here: Value And Momentum MDA Breakouts +70.5% In 52 Weeks: Final 2021 Year End Report Card

Momentum Gauge® trading signal: Positive conditions ahead of Week 35

2022 First-half weekly return results

First half returns with all weekly returns on the V&M Dashboard

MDA weekly returns 1st half of 2022

VMBreakouts.com

Red weekly color indicates negative Market Momentum Gauge signals. MDA breakout selections outperform when the market signal is positive and daily negative values are below 40 level.

Historical Performance Measurements

Historical MDA Breakout minimal buy/hold returns are at +70.5% YTD when trading only in the positive weeks consistent with the positive Momentum Gauges® signals. Remarkably, the frequency streak of 10% gainers within a 4- or 5-day trading week continues at highly statistically significant levels above 80% not counting frequent multiple 10%+ gainers in a single week.

MDA annual returns

VMBreakouts.com

Longer term many of these selections join the V&M Multibagger list now at 129 weekly picks with over 100%+ gains, 62 picks over 200%+, 21 picks over 500%+ and 14 picks with over 1000%+ gains since January 2019 such as:

  • Celsius Holdings (CELH) +2255.5%
  • Enphase Energy (ENPH) +1,9586.7%
  • Intrepid Potash (IPI) +1,539.9%
  • Northern Oil and Gas (NOG) +1083.9%
  • Trillium Therapeutics (TRIL) +1008.7%

More than 200 stocks have gained over 10% in a 5-day trading week since this MDA testing began in 2017. A frequency comparison chart is at the end of this article. Readers are cautioned that these are highly volatile stocks that may not be appropriate for achieving your long term investment goals: How to Achieve Optimal Asset Allocation

The Week 35 - 2022 Breakout Stocks for next week are:

The picks for next week consist of 1 Financial, and 3 Technology sector stocks with 2 Chinese stocks as the Bank of China injected 1 trillion yuan of stimulus last Thursday. These stocks are released to members in advance every Friday morning near the open for the best gains. Prior selections may be doing well, but for research purposes I deliberately do not duplicate selections from the prior week. These selections are based on MDA characteristics from my research, including strong money flows, positive sentiment, and strong fundamentals -- but readers are cautioned to follow the Momentum Gauges® for the best results.

  1. Daqo New Energy (DQ) - Technology / Semiconductor Equipment
  2. Full Truck Alliance Co. (YMM) - Technology / Software - Application

Daqo New Energy (DQ) - Technology / Semiconductor Equipment

DQ Chart

FinViz.com

Price Target: $87.00/share (See my FAQ #20 on price targets)

Aug-26-22 05:31AM Zacks Industry Outlook Highlights Livent, Daqo New Energy, Ingevity and Hawkins Zacks
Aug-25-22 08:10AM 4 Stocks to Buy From the Promising Chemical Specialty Industry Zacks
Aug-24-22 12:45PM 3 Reasons Why Growth Investors Shouldn't Overlook Daqo Zacks

(Source: Company Resources)

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp.

Stock Rover DQ data

StockRover.com

Full Truck Alliance Co. (YMM) - Technology / Software - Application

YMM chart

FinViz.com

Price Target: $12.00/share (See my FAQ #20 on price targets)

Aug-26-22 07:11AM We're Not Worried About Full Truck Alliance's Cash Burn Simply Wall St.
Aug-25-22 06:00PM Full Truck Alliance Co. Ltd. Q2 2022 Earnings Call Transcript Motley Fool
Aug-25-22 01:20PM Why Full Truck Alliance Was Soaring Today Motley Fool
Aug-25-22 08:00AM Edited Transcript of YMM.N earnings conference call or presentation 25-Aug-22 12:00pm GMT Thomson Reuters StreetEvents
Aug-25-22 04:00AM Full Truck Alliance Co. Ltd. Announces Second Quarter 2022 Unaudited Financial Results PR Newswire
Aug-11-22 01:54PM Why Shares of Alibaba, JD.com, and Full Truck Alliance Are Rising Today Motley Fool

(Source: Company Resources)

Full Truck Alliance Co. Ltd., together with its subsidiaries, operates a digital freight platform that connects shippers with truckers to facilitate shipments across distance ranges, cargo weights, and types in the People's Republic of China. The company offers freight listing, matching, and brokerage services; and online transaction services, as well as various value-added services, such as credit solutions, insurance brokerage, electronic toll collection, and energy services.

Stock Rover YMM data report

StockRover.com

Top Dow 30 Stocks to Watch for Week 35

First, be sure to follow the Momentum Gauges® when applying the same MDA breakout model parameters to only 30 stocks on the Dow Index. Market conditions have delivered the worst first half to the stock market since 1970. Second, these selections are made without regard to market cap or the below-average volatility typical of mega-cap stocks that may produce good results relative to other Dow 30 stocks.

The most recent picks of weekly Dow selections in pairs for the last 5 weeks:

Symbol Company Current % return from selection Week
MRK Merck & Co. -2.82%
AMGN Amgen, Inc. -3.93%
(MCD) McDonald's Corporation -1.43%
(MRK) Merck & Co. -0.39%
(CRM) Salesforce -13.11%
(MSFT) Microsoft Corporation -5.24%
(AAPL) Apple, Inc. +2.08%
(CVX) Chevron Corporation +3.50%
(AMGN) Amgen, Inc. -2.15%
(HON) Honeywell International +6.39%

If you are looking for a much broader selection of large cap breakout stocks beyond the weekly stocks, I recommend these long term portfolios. The new mid-year selections were released to members to start July:

Piotroski-Graham enhanced value -

  • July up +12.19%
  • January portfolio beating S&P 500 by +29.14% YTD.

Positive Forensic -

  • July down -4.90%
  • January Positive Forensic beating S&P 500 by +2.43% YTD.

Negative Forensic -

  • July up +33.30%
  • January Negative Forensic beating S&P 500 by +15.77% YTD

Growth & Dividend Mega cap breakouts -

  • August up +9.60%
  • January portfolio beating S&P 500 by +11.10% YTD

These long term selections are significantly outperforming many major Hedge Funds and all the hedge fund averages since inception. Consider the actively managed ARK Innovation fund down -54.7% YTD, Tiger Global Management -52% YTD, RTW Investment Group -34% YTD.

The Dow pick for next week is:

Dow, Inc.

Dow also was in early breakout prior to the Friday market reaction to Chairman Powell's speech. Price is still consolidating between 54-56/share toward breakout conditions as Basic Material stocks have been gaining off the lows of July. Institutions are net buyers and valuations remain excellent 6.1x earnings and 0.66x sales with one of the highest dividends of the DJIA stocks at 5.14%.

Finviz Chart DOW

FinViz.com

Background on Momentum Breakout Stocks

As I have documented before from my research over the years, these MDA breakout picks were designed as high frequency gainers.

These documented high frequency gains in less than a week continue into 2020 at rates more than four times higher than the average stock market returns against comparable stocks with a minimum $2/share and $100 million market cap. The enhanced gains from further MDA research in 2020 are both larger and more frequent than in previous years in every category. ~ The 2020 MDA Breakout Report Card

The frequency percentages remain very similar to returns documented here on Seeking Alpha since 2017 and at rates that greatly exceed the gains of market returns by 2x and as much as 5x in the case of 5% gains.

Breakout Frequency charts

VMBreakouts.com

The 2021 and 2020 breakout percentages with 4 stocks selected each week.

MDA frequency breakout charts 2021, 2020

VMBreakouts.com

MDA selections are restricted to stocks above $2/share, $100M market cap, and greater than 100k avg daily volume. Penny stocks well below these minimum levels have been shown to benefit greatly from the model but introduce much more risk and may be distorted by inflows from readers selecting the same micro-cap stocks.

Conclusion

These stocks continue the live forward-testing of the breakout selection algorithms from my doctoral research with continuous enhancements over prior years. These Weekly Breakout picks consist of the shortest duration picks of seven quantitative models I publish from top financial research that also include one-year buy/hold value stocks. Remember to follow the Momentum Gauges® in your investing decisions for the best results.

All the V&M portfolio models are beating the market indices through the worst 6 month start since 1970. New mid-year value portfolios are up sharply to start the next long term buy/hold period.

V&M Breakout portfolio returns YTD

VMBreakouts.com

The final 2021 returns for the different portfolio models from January of last year are shown below.

2021 portfolio returns

VMBreakouts.com

All the very best to you, stay safe and healthy and have a great week of trading!

JD Henning, PhD, MBA, CFE, CAMS



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This article was written by

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Revealing the best financial models targeting double digit success

Welcome! I am a Finance PhD, MBA, investment adviser, fraud examiner and certified anti-money laundering specialist with more than 30 years trading and investing stocks and other securities. I'm the founder of Value & Momentum Breakouts.

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I'm JD Henning, the founder of Value & Momentum Breakouts. I've spent decades studying how to get better returns in the market. I've earned degrees researching markets, and even more importantly, I've spent the time myself as a trader and investor.  I am one of those unusual multi-millionaire, PhD's in finance, former Coast Guard officer with a bunch of certifications ranging from anti-money laundering specialist, investment adviser, to fraud examiner...  who genuinely enjoys helping others do well in the markets.  I'm bringing the fruits of my experience and research to this service.  I am highly accessible to members to answer questions and give guidance.  

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It's been quite the start of the year for investors. My guess is, after a decade of good times in the market, you’re here looking for some guidance in how to navigate these volatile markets and the uncertainty of the coronavirus and inflationary conditions. You’re in the right place. For the past 5 years I’ve made my trading systems public and helped hundreds of my subscribers navigate and profit from every market downturn and breakout - including the coronavirus crash last year.



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Disclosure: I/we have a beneficial long position in the shares of BOIL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I continue to follow the Market Momentum Gauge® and Sector Momentum Gauge® signals. I adjust my exposure ahead of weekends and holidays to minimize the risk from these high volatility 3x funds that may not be appropriate investments for your portfolio. Readers are highly encouraged to consider your own optimal asset allocation strategies to diversify risks and enhance returns. I have been mostly in cash this year with many weeks of negative Momentum Gauge signals.

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